Most New Jersey environmental groups favor dedicating a portion of the state’s sales tax revenue to fund future open space, farmland and historic preservation projects rather than imposing a water-use fee or borrowing money through bonding.

A parade of groups testified in favor of the dedicated sales tax option Monday morning during a Senate Environment and Energy Committee hearing on the best way to replenish the state’s preservation funds, now that the last of the $400 million approved from a 2009 bond referendum is appropriated.

“New Jersey’s citizens have overwhelmingly supported this from day one, but we’re out of money and need to find a way to continue,” committee Chairman Bob Smith, D-17th of Piscataway, said at the start of the hearing. “It’s our job as the Environmental Committee to put the issue on the table.”

Three funding bills were discussed during the two-hour meeting, but the dedicated sales tax received by far the largest amount of support from those who testified.

That option would dedicate $200 million in annual sales tax revenue to fund open space, farmland and historic preservation projects for 30 years. Supporters said it would provide a long-term and stable funding source for both the acquisition of new properties and improved stewardship of already preserved land without creating a new tax or adding to the state’s $70 billion debt load.

“It represents less than 1 percent of state (tax) revenues and 2.5 percent of the sales tax,” said Kelly Mooij, coordinator for the New Jersey Keep It Green Coalition. “We think this is a wise investment for the state.”

The other two options discussed Monday were imposing a new water-use fee and borrowing another $400 million.

Mooij and several other environmental leaders said the proposed water-usage fee of 40 cents per gallon ($32 a year for the average New Jersey home) would provide a stable funding source, but they questioned whether the $150 million it is projected to generate annually would be enough to keep up existing preservation efforts and stewardship needs, particularly since the state is expected to push to preserve additional flood-prone properties along the coast in the wake of Superstorm Sandy’s devastation.

Most who spoke also rejected the bond option, claiming a sustainable funding source was better than the so-called “Band-aid approach” of periodically borrowing more money that the state has used over the last 40 years.

“We can’t just keep going boom or bust with stop-and-go funding,” said Tom Wells, director of government relations for the New Jersey chapter of the Nature Conservancy.

Jeff Tittel, director of the New Jersey Sierra Club, was one of the few environmentalists to testify in favor of the water-use fee, arguing that it makes the most sense because preserving open space helps protect the state’s clean-water supplies.

“The No. 1 reason why people support open space is to protect their drinking water,” Tittel said. “The people get that.”

He also said the water fee, which would be capped at a maximum of $50,000 for large consumers, would provide stable funding without diverting revenues from existing state programs.

“We can’t protect the programs we have. If we take another $200 million, where are we getting it from? What other programs are we going to have to cut?” Tittel asked. “The (Department of Environmental Protection’s) operating budget is down to $235 million. If $200 million is diverted to open space, we might as well put a closed sign on DEP.”

Representatives of business groups, such as the New Jersey Chamber of Commerce and the New Jersey Chemical Industry Council, said they were opposed to the water fee, but were undecided or neutral on the other two options.

“This is a good discussion to have, but it has to be done in the context of the state budget and with the Governor’s Office’s input,” said Mike Egenton, the Chamber of Commerce’s senior vice president of governmental relations.

Christie has supported appropriating money for open space preservation during his three years in office, but he has been silent about identifying a long-term funding source. During his 2009 campaign, Christie said he was against the $400 million bond referendum, stating that New Jersey was already too far in debt.

The measure was approved by a 52 to 48 percent margin.

Smith said he would like Christie and his eventual Democratic opponent to identify whether they support continuing open space preservation and how they believe it should be funded.

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